Posted
by
Soulskillon Saturday November 10, 2012 @12:34PM
from the not-playing-by-industry-rules dept.

An anonymous reader writes "Car dealers in New York and Massachusetts have filed a lawsuit that seeks to block Tesla from selling its pricey electric vehicles in those states. The dealers say they are defending state franchise laws, which require manufacturers to sell cars through dealers they do not own. Robert O'Koniewski of the Massachusetts State Automobile Dealers Association says, 'Those dealers are investing millions of dollars in their franchises to make sure they comply with their franchise agreements with the manufacturers. Tesla is choosing to ignore the law and then is choosing to play outside that system.'"

They cant sue under the franchise laws. Because the law is under combustible motors. It never included electric driven vehicles. Therefore this case should be thrown out of court on grounds of greed and control.

Since down below there's a bunch of PO-ed Romney supporters bashing Obama rather than talking about Tesla being sued, I find replying to Combustible Motors more on-topic!

Getting back to TFA, Tesla does not have stores selling Telsa's in those states. Instead, you buy them over the Internet. All Tesla has is showrooms where they can explain their story to people, but they can't sell cars. Tesla believes, and I agree, that this avoids running afoul of dealer franchise laws. Frankly, I don't see how these dealers can explain why it is illegal for people in New York to buy a car over the Internet, or why it is illegal for Tesla to have showrooms in malls. Laws to protect car dealers could only have been sold to state legislatures by used car salesmen. I hope these lawsuits crash and burn.

If manufacturers could sell through dealerships they owned, they would own every dealership. The franchise law is supposed to enable locals to own local, small business dealerships and still have an "in" with the major manufacturers. Without it, the major manufacturers would all just be the 800-lb gorillas they are, leveraging their giant corporate size for the benefits of more control.

It'd be nice if you could spend a moment to actually consider why it might be before complaining, since your argument about political quid pro quo with corporations is actually working against itself here.

I really wouldn't have a problem with that. The byzantine system of distributors, dealers, invoice pricing, dealer kickbacks, rebates, dishonest service requirements and everything else that makes car sales so opaque is not something worth defending. Does it really make a dimes worth of difference to me if the local dealership is owned by a guy on the city council (aka, local small businessman) or the corporation?

I live in a small town and see nothing but the bad side of local ownership. One of the local dealer is so bad that they have refused to do warranted service on cars not purchased locally and had a horrible reputation. Eventually they were threatened by corporate with losing the franchise and improved a little. Eventually the old coot that owned the place retired and passed it on to someone slightly less insane.

IMO the local ownership creates far more negative local influence than corporate ownership would have.

Precisely. Since they passed such regulations in the U.S. (see my Wikipedia link above), the number of MAJOR native manufacturers has gone from 14 to 9 (if you count CMC as one, which you probably should).

Not only that, in the last year listed, 1998, not one of them sold a million cars. Foreign competition is largely responsible. And it would not be possible without restrictive regulations.

People need to think before they start spouting this "Oh my god, let's kill the monopoly" B.S. And maybe look at

Not only that, in the last year listed, 1998, not one of them sold a million cars. Foreign competition is largely responsible. And it would not be possible without restrictive regulations.

You're complaining that unspecified regulations make the market too free? The cars designed in Japan (but manufactured here) were cheaper and better made than the American designed ones... Americans love crappy rust buckets, if only regulations had let us buy them instead of those functional and competently designed cars (::spit::) from foreign competitors.

What nonsense. I searched through your comment history looking for the Wikipedia link you mentioned and couldn't find it. I did notice you talking abou

I wasn't "appealing to authority". I was simply pointing out to you that causes of monopoly were widely recognized more than 230 years ago... and they aren't always what you say. Although sometimes they are.

" Let's look at the data instead... Every single monopoly to in existence today is a government granted monopoly."

Cherry-picking your data does not impress. Even if you were correct (and you aren't), it wasn't always that way.

For example, Standard Oil was not a "government-granted monopoly"... although it definitely became a near-monopoly. It was the government that helped to break their monopolistic hold. Ignore

We are dangerously close to a chicken or egg conversation here. Clearly a number of these companies are monopolies or virtual monopolies because the bought the government power necessary to get the laws in their favor. So you point at the beast and say bad government, and I look at the exact same beast and say evil corporation, and it occurs to me that it is perhaps the inherent dangers of large corporation in collaboration with a corruptible government that grows these nasty beasties.

Gas stations are completely different, because gas is largely the same between all of them, making it fungible. It's also incredibly cheap. The giant corporations like ExxonMobil wouldn't gain much from pushing local owners out of the market, since other oil corporations can compete with them on the exact same product across the street. They would gain comparatively nothing in exchange for the hassle of directly running tens of thousands of gas stations each. Indeed, some of the major oil corps have got

You're pretty obviously not all that great at following discussions, so you can drop the attitude. I just looked again and the only things I found are more people mentioning that you never linked it and yourself linking to your own slashdot post. Not to mention your inability to see the name of the person you're replying to, where you confused myself for someone else who was actually supporting your larger arguments. Who you disagreed with, and reiterated you disagreed with, when I pointed it out.

I'd say cue the right-wing retards that present a bunch of lies in order to support their failing party, but you already did that.

How about some facts (look 'em up!):Bush started with a surplus and left with a trillion dollar deficit.The deficit has been decreasing since Obama took office.Unemployment has been decreasing since Obama took office.

Instead of just parroting Fox News lies, why don't you present some facts to back up your fucking insane opinions.

"During a recession, things suck. During the worst recession since the Great Depression, things suck more than during a regular recession."

Bush raised the deficit and grew government during growth years. Obama lowered spending each year he was in office and shrank government during a recession. I know you won't actually look this stuff up; Fox News discourages independent research. But you should.

Cue all the idiots with their "yeah but republicans do bad stuff too, so there!"

No, cue all the people who want a sane discussion with their "Shut the everloving fuck up about the goddamned election you LOST already, this discussion is about a statewide car dealership law in New York, now stop trying to change the subject, you prosecution-complex-suffering asshole".

I'm not so sure. I recall that at the time that Dubya was trying (and more or less failing from what I could tell) to make a public case for the invasion of Iraq, Clinton actually commented that he was in favour of it.

The reason I remember this so clearly is because it made an impression on me. Here is the current and previous presidents (and one of them being the son of the previous president to this lineup) who, among them, seem to have 12 years or so of knowledge of something (I'm assuming that Dubya h

George W's administration stopped listening to the pentagon, CIA, and NSA started going over all of the "intelligence information" personally. They read a bunch of crappy intel, got their own people to get more of it, and then backwards rationalized to attacking Iraq.

Yes, Bush thought there was a legitimate threat. Yes, Bush and his administration read scary intelligence reports. But, as the saying goes, garbage in, garbage out. They went on a fucking marketing blitz to make their case and went to great

1. Clinton warned the Bush cabinet of Bin Laden in no uncertain terms including he was up to something big from day 1
2. The Bush cabinet pissed the first 8 month of the Presidency clearing brush on the ranch, and trying to rejump-start the star wars missile defense initiative, in the fervent hopes of pumping billions into Cheney's company Halliburton.
3. After the attack, instead of chasing Bin Laden into Afghanistan, we went on a snipe hunt so Cheney could play

Actually, many states have a reciprocal tax agreement that coordinates how taxes are handled when a new car is sold across state lines. I live in Michigan and bought my car in Illinois. Those 2 states have a reciprocal tax agreement. I was originally going to buy from Ohio, and those states also have the same reciprocal agreement.

A reciprocal tax agreement basically says when you live in state X and buy in state Y, you pay state Y the lesser of both state's sales tax. Then when you register it in state X, you pay state X's tax rate but get a credit for whatever you paid to state Y. So, here's 2 examples:

1) State X = 5%, State Y = 6%You buy in Y, and you pay Y 5% tax. When you register in state X, you've already paid 5% tax (to state Y) so you owe nothing to state X.

2) State X = 6%, State Y = 5%You buy in Y, and you pay Y 5% tax. When you register in state X, you owe 6% but get credit for the 5% already paid, so you only owe state X an additional 1%.

I really, really hope they loose due to that element. I utterly loath these car dealers, and their 'but we invested money! we should have the law protect us!' argument just doesn't do it for me....

There are times and places where regulation is useful, but this type of protectionism that forces companies and consumers to go through some cartel of private businesses simply because they got a special law just.. it doesn't do the population any good.

It can cover ATVs, along with snowmobiles and boats. The law calls them out as examples of motor vehicles, however the law also allows the commissioner to exempt things other then cars, trucks, and motorcycles.

No, it only applies to MOTOR VEHICLES which meet certain definitions. One of those definitions is that it must BURN or Combust, by the definitions of fuel in that chapter (60? 61?) and pursuant to definitions further found in chapter 90.

Electric motors are not even counted, even under the "Alternative Fuel Vehicles" section, because, again, electric cars do not meet the definition of a fuel-burning vehicle.

No, it only applies to MOTOR VEHICLES which meet certain definitions. One of those definitions is that it must BURN or Combust, by the definitions of fuel in that chapter (60? 61?) and pursuant to definitions further found in chapter 90.

Well, I'm not a lawyer, but the definition here straight from chapter 90 doesn't seem to say anything to that effect:

âoeMotor vehiclesâ, all vehicles constructed and designed for propulsion by power other than muscular power including such vehicles when pulled or towed by another motor vehicle, except railroad and railway cars, vehicles operated by the system known as trolley motor or trackless trolley under chapter one hundred and sixty-three or section ten of chapter five hundred and forty-four of the acts of nineteen hundred and forty-seven, vehicles running only upon rails or tracks, vehicles used for other purposes than the transportation of property and incapable of being driven at a speed exceeding twelve miles per hour and which are used exclusively for the building, repair and maintenance of highways or designed especially for use elsewhere than on the travelled part of ways, wheelchairs owned and operated by invalids and vehicles which are operated or guided by a person on foot; provided, however, that the exception for trackless trolleys provided herein shall not apply to sections seventeen, twenty-one, twenty-four, twenty-four I, twenty-five and twenty-six. The definition of âoeMotor vehiclesâ shall not include motorized bicycles. In doubtful cases, the registrar may determine whether or not any particular vehicle is a motor vehicle as herein defined. If he determines that it should be so classified, he may require that it be registered under this chapter, but such determination shall not be admissible as evidence in any action at law arising out of the use or operation of such vehicle previous to such determination.

Where does the law say that it applies only to vehicles that burn fuel?

No, it only applies to MOTOR VEHICLES which meet certain definitions. One of those definitions is that it must BURN or Combust,

Where do you read that a motor vehicle must burn or combust?
93B chapter 1 says

“Motor vehicle”, any motor driven vehicle or house trailer required to be registered under chapter 90 regardless of curb weight...

Chapter 90 defines a motor vehicle:

“Motor vehicles”, all vehicles constructed and designed for propulsion by power other than muscular power...

This definition is quite long, but I see nothing that talks about burning or combusting.
Perhaps chapter 60/61 discussing burning and combusting, but that chapter is related to taxes, and not the franchise laws in question.

And yet you failed to read the mentioned other chapters, which link again to even more chapters, which shows that you're totally fucking wrong, because electric motors don't even fall under the 'Alternative fuel Vehicles" because the legal definition of FUEL in the state.

Try again when you can read all of the laws and understand them, and not take just one into account, eh?

Is it? I thought it was," we have to obey these government imposed laws, you should too".

Except these laws were not "imposed" on the car dealers. The car dealers lobbied and bribed to get these laws passed. They are anti-consumer and anti-free-market. They are a result of sleazy special-interest politics.

Except these laws were not "imposed" on the car dealers. The car dealers lobbied and bribed to get these laws passed. They are anti-consumer and anti-free-market. They are a result of sleazy special-interest politics.

Think it through. You get discounts off MSRP because the franchisee dealers compete with each other. If the manufacturer is also the only dealer, you will see the same price at every dealer; full MSRP. This law is pro-consumer, not anti.

Except that consumers actually prefer no-haggle pricing. Many people, including me, find the dealership experience unpleasant. With manufacturers competing with each other vs dealers, it's more likely that each manufacturer will try to give you the best price, or at least appear to do so. With dealers, you just expect to have your wallet pillaged.

He's got a point though. The dealers act like a union. By aggregating the purchasing power of multiple car buyers, they can negotiate for better pricing from the big corporate manufacturer than if everyone bought from them as individuals.

What's getting you upset is that the dealer-union, instead of passing on the same better price to everyone, plays a negotiating game and rewards those who are better at it with a better price. It's like haggling in moira [google.com]. A lot of players hated having to haggle in th

Except that currently the way pricing is structured, I don't actually know what the price of two cars from different manufacturers are until I go to a dealer for each one and spend several hours haggling over the price. So manufacturers don't really compete with each other over price. They compete over much more intangible properties, properties that are subjective and thus able to be influenced by effective marketing campaigns. For the most part, the Chevy dealer does not compete with the Ford dealer, by the time most people start to think about what dealer to visit they have already chosen what brand they are going to buy.

As far as independent garages go, why would they need to be certified?

Oh, right, otherwise they don't have access to the manufacturer's diagnostic codes and meanings!

One of the good things that came out of this election cycle in Massachusetts is that voters voted Yes for the "Right to Repair" ballot. This essentially forces car manufacturers to provide "proprietary" diagnostics information to independent garages.

If the manufacturer is also the only dealer, you will see the same price at every dealer; full MSRP.

... and then the manufacturers would have to compete against each other on price, and the MSRPs would drop. I don't see a problem there. It's not like there is currently a lot of benefit to the consumer in having every car labelled with an irrelevant MSRP price that only suckers actually pay. Wouldn't it be nicer if the MSRP was actually a reasonable price, and you could just go in and buy a car at that price without haggling for hours? That's how most consumer purchases work, and it makes buying a lot less stressful.

Nope. Those laws were made for the protection of the franchise contracts, so the manufacturers couldn't make a franchise agreement with a dealer and then establish another franchise within the franchisee's territory or go into direct competition with their franchisees. In the case of a company store opening in an area where there are no dealers for the brand. It's essentially protecting the value of the franchise contract from being undercut by the manufacturer. But if there is no franchise contract covering the territory... who is hurt? Dealers for OTHER BRANDS? Who the hell cares? Those dealers have no contract with Tesla and no interest to protect.

It sounds like New York and Massachusetts are trying to apply the law outside its scope.

Slashdotters are just short-sighted employees (with a guaranteed paycheck at the end of the month), that only care about the smaller price. They don't run a retail business and they don't know what the "game" really is. They only see a store owner as a "greedy middleman". And they think it's ok (simply because it's not illegal) to walk into a store and get advise and try a product, only to run home and buy it on amazon. (OH but they do CRY when they are outsourced by someone in india who gets paid less!)

Sorry, but if the comic book distributor model is the more economically viable, then your firm should go out of businesses. Nothing personal at all, its just the economic reality of it and you state it yourself. The publishers do not want to be bothered selling small numbers of copies to stores like yours as it inflates their costs and reduces their margins, thus they sell to the distributor/wholesaler. If that does not leave enough additional margin for a further downstream seller (and I'm not talking

Even if it did, I don't see the death of the dealership, especially when you're talking about something the size and price of an automobile. As far as cars being shipped from maker to future owner? Already happens. I've had cars from overseas shipped to the US.

Except Tesla doesn't have dealerships that sell cars. To buy a Tesla you order it at their web site where you order exactly what features you want then they custom build it for you. They have the show rooms, but the show rooms don't do sales.

As a consumer I really like it. When I bought my Prius I could not get the one I wanted (I got my 3rd choice in color) because I was limited to what the dealer received. 90% of the cars they got were white and I didn't want white. I ended up having to wait 5 months unti

Oversimplify much?You think you just sit around and wait for people, to just BUY a car? Just take your share and go on your merry way?You have to SELL. Selling is a job. We storeowners are not "middlemen". We wake up every day, go to work, pay taxes, have debts. We WORK.

And unlike you, we actually have risks. You? You're clearly an employee. you have an assured check at the end of the month. Me? If I don't sell, I have to touch the "rainy day fund". Something you only do when you're fired.

Following your logic, you have no argument to get mad when the company you work for replaces you for an indian working for a fraction of your salary. Do you?

I'm a consumer. I buy things not because of salespeople but despite them. Buying a car is one of the least pleasant things I ever have to do, and that's entirely because of the salespeople and the dealer model. I would almost certainly buy more new cars (thus boosting the economy and helping to employ more people who actually, you know, make things) if I didn't have to go to a dealer to do it. Just let me browse & compare online, with accurate prices, and pick what I want for delivery. You know, like I do for EVERY OTHER DAMN PRODUCT I BUY. The dealer adds precisely zero value, in fact the dealer removes value, and does so at a high cost to me. Shut em all down.

It's a made up, unnecessary job. It was only needed when it was hard to get information. These days, I can look at any car I want online, often it means a 3D walkthrough is available as well. There are reviews available as well. I don't need someone to sell anything to me. I want, perhaps and occasionally, a showroom to go to and see a car. Not BUY a car, just see it and feel it. This can be provided by the manufacturer, or a third party -- I'd gladly pay for the privilege, say $10 per entrance to a showroo

The car dealer franchise laws began in California w/Reagan helping a buddy's business. Soon Bush did similar in TX, then lobbyists picked up the ball and rolled it to the other states.I can think of no other industry where it's in fact *illegal* for a manufacturer to sell their own product directly to consumers.It makes it so that it is no longer a free market. Who knows what options and colors people actually want--dealers order speculatively what they think they can sell, then sell them--people wind up choosing between the existing inventory, usually none having exactly what they want. You'd think on big ticket purchases people would be more picky about getting exactly what they want--but we wind up with millions of same-colored cars on the road anyways.

Strike down these laws and it should be possible to actually order a vehicle that you customized on a manufacturer's "build-your-own" website--rather than it directing you to a bunch of local dealers that have their heads up their asses and don't actually have one in stock like you just spent 20 minutes configuring.

Furthermore, right now, if you want to place a custom order, you *have* to do it through a dealer--who is now an unwelcome middleman that *hasn't* made a sale yet thinks they still deserve MSRP markup for merely printing out the paperwork even though you beat a path to their door with no other option.

Again.. these people are *not* free marketers. They are opportunists. They are fine with the free market as long as it benifts them. When they are on the losing end they're absolutely fine with the government intervening in every possible way.

Do you know if they have a similar system in Europe? I believe you can order direct from Audi and actually go over to their factory to pick the car up.

And yea, the dealer only option sucks, as when, for example, you're looking to buy a V8 VW Tuareg, mainly for its compact size and towing capacity, you have to buy one with *all* the options, because that's the only thing that was imported. Very anti-consumer.

Insist that they order a car to your specs. You'll have to wait but I know people who regularly do it with Audis and VWs. I almost did for my last car but they found one 10 hours away that was almost exactly what I wanted so I opted not to wait the 6-8 weeks. At least in Canada, I haven't found a VW or Audi dealer who won't place a factory order with fewer options than anything on their lot.

I haven't found a VW or Audi dealer who won't place a factory order with fewer options than anything on their lot

I've had a completely different experience with VW. The dealer said that he could order the car with options I wanted, but would not consider anything less than MSRP. That's for a car that they were selling for anywhere between $3000 and $4000 off of MSRP for the ones on the lot.

In practice, it was equal to a refusal to order it. I ended up getting a Nissan...

lol... these laws cover almost every product out there. Try and sell alcohol "Direct" to the consumer and you'll find out about them really quick. There is only one, count them ONE liqueur distributor for the entire Chigago metropolitan area... and the laws are such that it costs a fortune to apply for a distribution license and you are guaranteed not to get it.

Picking a heavily restricted special case product that was so special the constitution got changed twice due to entirely to it and applying it to "almost every product" does not a reasonable argument make.

I can buy pumpkins from a local farmer who grew them. I can buy a computer made by Dell from Dell. I can buy ink for my printer directly from the manufacturer. I can pay a local carpenter to build me a table directly. I can buy a house from the builder.

I can think of no other industry where it's in fact *illegal* for a manufacturer to sell their own product directly to consumers.

The motion picture industry was vertically integrated until 1948. MGM and Lowe's at the top. Paramount and Warner Brothers lower down. If you wanted decent exposure for your independent production you had to cut a deal with the majors.

America is so focused on blaming republicans/democrats, that they don't realize that they both follow the same principal: Laws are for sale. Stop this blame game and wake up. Your government has been taken over by big business, and it is the American people who are getting screwed to ensure that the wealth trickles to the top 0.1%. It's so ironic that America's ideal is to spread democracy, while its own democracy is a corrupted mess.

Elon Musk made a blog post about all this legal turmoil last month. Worth a read.

From that post:

Existing franchise dealers have a fundamental conflict of interest between selling gasoline cars, which constitute the vast majority of their business, and selling the new technology of electric cars. It is impossible for them to explain the advantages of going electric without simultaneously undermining their traditional business. This would leave the electric car without a fair opportunity to make its case to an unfamiliar public.

Which, IMHO, is bunk. Every car they are selling is different from every other, that's just product differentiation. Saying they can't sell electric cars without undermining their gasoline cars is like saying they can't sell white cars without undermining their red cars. I suspect this is Tesla Motors trying to keep the entire supply chain under control (and thereby not allowing third parties to add a little margin on top of the sales price).

I suspect this is Tesla Motors trying to keep the entire supply chain under control (and thereby not allowing third parties to add a little margin on top of the sales price).

No shit. The question is, what's wrong with that? If you buy a car from them, you're free to resell it, as you own it.

The real problem with EVs from the perspective of the dealers of gasoline vehicles is that they are sold under an entirely different model. A gasoline vehicle is intended to produce a certain amount of service revenue. An EV is intended to minimize service. We had a bailout because people weren't buying American cars because they were shit. By all accounts they are somewhat better now, which has severely impinged on service revenues. Dealers get the service money and massively pad parts prices in most cases, and the automaker also pads the part prices, which is their prerogative (though sleazy) since they signed the contract for Delphi or Hitachi or JECS or Bosch or whoever to make sixty hojillion fuel injectors or whatever. If you make an EV designed to produce service revenue you can only do it in ways that will make the car unsafe (suspension defects) or ways that will make it look like shit and be immediately detectable even on a good test drive (interior flaws.) So basically, the problem with EVs from the standpoint of the major manufacturers is that they cannot intentionally make some of them pieces of shit in order to differentiate their other products which are made as well as they can make them, and which are still crappy compared to the imported competition. All you have to know about that is that the six-figure Ford GT had typical shitty Ford interior.

The Tesla "Dealers" are show rooms and advertisements only, you cant test drive, you cant get the keys, They may not even be owned by Tesla at all in some states to get around Franchise laws. BMW does the same thing, as do a lot of non-US car builders. They advertise a trip to some place where the car is built and you then buy the car in Europe.

In this case they advertise the car in a mall or other location, and then provide you internet access to the Tesla plant to place an order. The show room makes no money and sells no car.

Ford cant do this because its contracts with dealers would require Ford to pay the dealer if it somehow sold a car in that state. Tesla has no such contract with its advertisers.

In the end, all sales are done out of California, cars are built there, and shipped to the person, the show room has no additional involvement in the process.

Whatever you do, please don't attribute this to actual "capitalism" or "the free market." When people talk about deregulation as a horror, realize this is the kind of horror that the deregulators seek to undo -- complacent vendors with a cozy layer of protection against new entrants.

Also, consider how much like these state franchise laws resemble gerrymandering district agreements -- both rely on passing in secret -- or at least in relative obscurity, in a process that regular folks rationally stay away from -- agreements to use the force of law to keep things tidy, stable, and predictable (and profitable, for those who've done the manipulating), rather than dynamic, risky, interesting, innovative, and other nice adjectives.

The laws that give special privileges to state-sanctioned franchise owners are bad, even if they have some small silver linings, whether the franchise is for transportation, banking, legal services, auto sales, gambling, or Dixie cups. Not that their history in the auto industry isn't interesting -- this podcast is enlightening on that topic: http://www.econtalk.org/archives/2009/06/munger_on_franc.html [econtalk.org]

I'm sure there are some deregulators who honestly want to eliminate crony capitalism like this. I'm also sure there are a lot who just want free reign to do whatever they like, the rest of us be damned.

The state of NY isn't going to be happy if they have to lose out on all that tax revenue because consumers have to go to jersey or some other state to buy cars. Maybe that isn't the case right now, but as time progresses I think combustion engine cars will become less and less desirable.

What tesla should do is to give out non exclusive franchises for $0.01 online. Anyone can get one: corner stores, private people, my cat, just saturate the market. Then when you want to buy a car you would buy it online through some "local" dealership. Technically bob down the street would sell it to you but Tesla would handle the transaction for Bob and then pass bob his $0.02 commission.

There are few organizations that I detest more than car dealerships.

A better end run of the law would be to go federal and try to slip in an online sales rule that overrides any local laws. That would be a 21st century way to go. I don't care where Amazon's HQ is and I certainly don't want a stupid local law getting between me and Amazon.

Auto dealer franchise laws reflect a long history of auto manufacturers screwing dealers. Auto dealers were traditionally small businesses with one supplier, which put them firmly under the thumb of the manufacturer. Many dealers still are, although some are big mufti-manufacturer chains.

After looking at the New York [onecle.com] and Massachusetts laws, it's not clear that they prohibit a manufacturer from selling entirely through their own stores. What the laws clearly prohibit is a manufacturer competing with its own dealers. If a manufacturer doesn't have any independent dealers, the law probably doesn't apply. The dealers are trying to stretch the law by arguing that the manufacturer is unfairly competing with their dealership, but that may not work.

California prohibits a manufacturer from opening a company store within 10 miles of a dealer, so Tesla has no problem there.

Personally, I'd be tickled if GM/Ford/Chrysler/Tesla/whoever could open their own dealer network. That would rid us of the thousands of smarmy dealerships (many with horrid BBB records) that prey on folks who just want to buy and maintain a car. Then consumer complaints could be handled more centrally and dealt with at the source. In theory, this would be financially better for the consumer since you'd be removing an extra profit center between the manufacturer and the consumer.

I'm not a big supporter of complete Laissez-faire capitalism, so don't take this the wrong way... But this story is about exactly the opposite of what you seem to think it is. The problem in this case is the franchise law -- which is government interference in the free market, which is anathema to true capitalism -- not with capitalism. Of course dealerships are going to sue -- they've got a nice racket going on, with government backing.

I think you missed the point of the OP. That was precisely what he was saying.

This is a government backed monopoly (in my opinion, the only true use of the word "monopoly"). It needs to be shut down. The same way utility providers currently get to exercise monopolies, enforced by government. Tesla ought to succeed or fail on their own merit (and I think they will fail, but they deserve the chance).

This is a government backed monopoly (in my opinion, the only true use of the word "monopoly"). It needs to be shut down. The same way utility providers currently get to exercise monopolies, enforced by government. Tesla ought to succeed or fail on their own merit (and I think they will fail, but they deserve the chance).

Actually, the is the exact opposite of a government-backed monopoly. The point of the franchise law is to prevent there being a monopoly, by preventing the auto manufacturer from owning all of the dealerships.

You are aware that there is more than one auto manufacturer? And, they already compete with each other on price? There is no need for another layer whose only purpose is to compete on the middle man markup.

I don't know what it is about these people. Don't they feel a bit of disgust trying to get in the way of someone who is, unlike them, trying to do something cool with their lives?

They do, but they blame that on whoever is trying to do something cool. That's what denial looks like. It's a reiteration of the emotional immaturity that has become so widespread.

Now they have to try even harder to shut them down, or else they'll be disgusted with the ineffectiveness of their disgust. There's potentially no end to how many layers of denial can be heaped on it. When people falsely think they are justified, they really badly need to win no matter how much they don't deserve to. Not g

They really think that because they "paid their dues" to the system that the system needs to stay in place forever. Their disgust is reserved for new entrants who don't understand how the system "needs" to work.

As much as I'd love to believe that, I don't think this has anything at all to do with internal combustion vs electric. This strikes me more as a "there's new competition in town and I hate competition" issue. I'd be willing to bet that if Tesla was selling internal combustion vehicles this case would still be exactly the same.

I really wish companies in general (in every market segment) would stop using the courts to enforce a profit. Compete on merit and we all win, compete on legalities and everyone loose